Buying and Selling a Home For Dummies

Melanie Bien

• Publisher: For Dummies
• Year: 2011
• ISBN:
  9781119997122
• Edition: 2
• Topic: Business
• Subtopic: Real Estate
• Index: Business

No-one obsesses over property quite like the British, even though buying and selling a home can be a personal headache and a financial lucky-dip. British newspapers groan under the weight of property supplements; TV reports constantly track house prices; young people fret about getting on the property ladder, while established homeowners worry about how to increase the value of their home or the market crashing.

Buying a property is rarely straightforward and can be very time-consuming. There are numerous choices to make, from the style of building and location, to proximity to schools and other amenities. Most of all, there are plenty of opportunities to make the wrong decisions.

Selling your home is also fraught with stress; from deciding to move and evaluating your property's worth to finding an estate agent and putting your home on the market, every step comes with it's own difficulties. Plus the advent of the Home Information Packs has also created a new headache for potential vendors.

Buying and Selling a Home For Dummies, 2 nd Edition covers everything from finding a property and getting a mortgage to preparing your home for sale and moving on. It is also one of the few guides to cover England, Wales and Northern Ireland as separate entitles from Scotland, and to cover the Scottish property market. This updated guide also contains coverage of HIPS (Home Information Packs), which were made compulsory in September 2007 and apply to all properties with three or more bedrooms.

Part I

So You Want to Buy Your First Home?

In this part . . .

Buying your first home is one of the biggest purchases you will ever make in your life. The chapters in this part guide you through the process of figuring out whether it’s the right time for you to take the plunge. I also fill you in on working out whether you can afford to buy your first home, and how you can manage it even without a huge salary or sizeable deposit. I also help you establish where you should buy.

This is the part for you if you’ve just started to think about purchasing a property, but you’re not quite sure whether you are ready, or able, to do so.

Chapter 1

Why Getting Your Foot on the Property Ladder Is a Smart Move

In This Chapter

Being aware of the advantages of owning property

Knowing the different ways and means that enable you to afford your first home

Making sure that you don’t lose your hard-earned cash in a property crash

Understanding your responsibilities as a homeowner

Congratulations! You’re thinking about buying your first home and getting a foot on the property ladder. Property is an excellent investment: not only does it enable you to kiss goodbye to grotty rented accommodation and throwing money down the drain – paying the rent – you’re also investing in something that’s likely to increase in value over a number of years. That has to be a sound move.

But it’s a tough environment for first-time buyers, many of whom delay getting on the property ladder because they simply can’t afford to buy any earlier. The average age of a first-time buyer in 2006 was 33, according to the Halifax, the UK’s biggest mortgage lender. The reason? Many people spend their twenties paying off student debts and struggling on low incomes, which can make drumming up a deposit impossible. Rising house prices, particularly in London and the south-east, have created further problems for first-time buyers, making a place of their own seem an ever-diminishing dream.

Before you go any further you need to determine whether you are ready to buy your own home. In this chapter, I start by giving you the low-down on some of the advantages of owning your own property. Then I help you to assess whether you can afford to do so now or whether you need a bit of help before you are in a position to buy a place of your own.

Recognising the Advantages of Owning Property

Property serves two functions: It provides you with a roof over your head, and it is serves as a wise investment in the longer term. But unless you’re buying a rental property, which you do specifically to make a profit (see my book Renting Out Your Property For Dummies for detailed information), having adequate shelter is more important than making a huge profit. You need somewhere to live; that is the very practical reason behind buying a home. The following sections outline the advantages you’ll accrue from making such a practical decision.

Closing the door on the rest of the world

If you live at home with your parents, you may be looking for a bit more independence; if you’re renting – with friends or on your own – you may be looking for something you can decorate to your own tastes and make decisions about without anyone else’s permission. Buying a home may very well be the answer.

There's nothing quite like walking into your new home – the one you’ve managed to buy yourself – for the first time. It is the most incredible feeling. But it gets even better. Having your own space means not having to answer to anyone else, not having to do what anyone else wants, and being able to live exactly how you like. If you live alone in your new home, you don’t have to queue up for the bathroom anymore. And if you want to stay in bed all day in your one-bed flat, what’s to stop you? (Just ignore for a moment the fact that your boss may have something to say about you lounging in bed on a day when you should be in the office!)

The best bit about buying your own place is that it’s your space. You don’t have a landlord to kick you out after six months because he or she’s planning on selling the flat or house from under you. And because it’s your space, you’re more likely to stay in an area for longer (homeowners tend to put down roots), which can be very attractive if you’ve spent years lugging your belongings between different rental properties.

No more throwing money down the drain

Most tenants complain about paying rent because they don’t see any return in the long run. You get a roof over your head for several months, and that’s it. If you recognise that property tends to appreciate in value over time, you’re likely to feel that you’re missing out the longer you delay purchasing your own place.

In addition, decorating rented accommodation is a waste of your time and money. Spending money doing up your home – painting and wallpapering and buying new furniture – makes perfect sense if you own the property. But doing up rental accommodation doesn’t make sense. If the landlord supplies the materials and you supply the labour, you may not waste your own money, but you should consider whether you really want to spend your free time adding value to the landlord’s property. And if doing up your rented accommodation means paying for the improvements yourself, doing the work on your own, and having the colour scheme approved by the landlord, you may want to think twice about whether it’s worth the hassle.

Keeping your own home in good decorative order is a good investment. You will also have less work to do when you come to selling it later on.

Buying When You Don’t Have a Huge Deposit or Big Income

With thousands of mortgages available from over 100 lenders, you’re bound to find one out there that suits you – even if you haven’t got a big deposit or earn hundreds of thousands of pounds every year.

Buying without a deposit (or with a very small one)

Homebuyers used to save up for years for a deposit before they could get on the housing ladder. Without a sizeable deposit, lenders simply wouldn’t take you seriously and agree to l...